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NTT Docomo led a 3.8 trillion yen ($34 billion) stock rout of Japan’s top three mobile carriers after it appeared to cave in to pressure from the government, which has long claimed the nation’s phone bills are among the highest in the world. Docomo, which said on Wednesday it may cut rates 40 per cent and “return” 400 billion yen to customers, plunged as much as a record 15 per cent in Tokyo trading on Thursday. Rival KDDI tumbled as much 17 per cent, and SoftBank Group slumped as steeply as 9.1 per cent amid concern that they will follow suit.

Docomo’s plan to cut rates in the year starting April 1 sparked concern that industry profits will slump for years, exacerbating a market that’s already plagued by saturation and increasing competition. The move comes after Japan’s government, particularly Chief Cabinet Secretary Yoshihide Suga, repeatedly called for carriers to reduce phone bills.

“What surprised investors is Docomo will take about five years to recover above the profit level for the current fiscal year,” said Naoki Fujiwara, chief fund manager for Shinkin Asset Management in Tokyo. “Other major mobile carriers may have little choice but to follow Docomo with price cuts.”

During its earnings announcement on Wednesday, Docomo unveiled a mid-term plan that signaled its profits won’t recover until fiscal 2023. Docomo reduced its forecast for net income in the current fiscal year by about 3.6 per cent to 670 billion yen, which would mark a 10 per cent drop and the first annual decline in years. Docomo’s warning on Wednesday that the company will offer plans starting April 1 that will lower rates by 20 per cent to 40 per cent overshadowed the announcement that it will repurchase as much as 7.24 per cent of its stock for 600 billion yen to help drive up shareholder returns. It will consider canceling all the shares it buys back.

On Thursday, KDDI President Makoto Takahashi said the company won’t follow Docomo’s price cuts. He said the company had already introduced lower rates. SoftBank said it is considering its pricing based on competition and user needs.

The latest round of comments by government officials began in August, when Suga said carriers have room to cut bills by 40 percent.